Reusse: Quite a bonanza for our stadium martyr, Zygi
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We in the Twin Cities sports media were so amped up over getting a new stadium for the Vikings and thus maintaining them as a subject to write and talk about that not much time was spent looking at the financial realities.
We have allowed owner Zygi Wilf to be crowned as a patient, generous hero in the proceedings that led to the approval of the stadium on Thursday in the State Legislature. Gov. Mark Dayton did more than anyone to overcome the political odds against this thing and gain approval for the stadium, yet he was effusive in his praise of Wilf at the victory news conference.
Of course, it's in the best interest of Dayton and all other political supporters to send along the message that getting the extra $50 million from the team was the result of driving a hard bargain with the Vikings.
Listen, I was on board with this _ for the same biased reasons as other people making their living in the sports media _ but more so because of this belief:
That an active downtown Minneapolis is the most-important element in maintaining a vibrant metropolitan area.
The truth is that at the new number for the team share, $477 million, this remains a marvelous deal for Wilf and the Vikings. These tycoons always borrow the millions they put into stadium deals, so that they can use the interest on the debt as a write off against the new profits.
And in the case of Zygi, much more than with the Pohlads and Target Field, the new profits are going to be enormous _ with the combination of higher prices everywhere in the stadium, fabulous new suites and thousands of other premium seats.
Consider this: The Twins were able to pick up an extra $6 million with the $2,000 per seat, upfront license fee for the 3,000-seat Legends Club at Target Field. Can you imagine the ease with which Zygi will be able to collect greater upfront license fees for premium seats in the new stadium?
I'm estimating an average of $4,000 for 10,000 premium seats (not suites) in the coffers before the new stadium opens. That's $40 million in the Vikings' coffers.
The Vikings also received the entire take from naming rights. I've asked Twins officials and other sports executives what the Vikings can expect as an annual fee for naming rights and was told: "Seven million, maybe eight.''
Put it at $7 million annually and that's $210 million over a 30-year lease.
Zygi will be getting $200 million of his $477 million from the NFL. When he borrows the other $277 million and starts paying it back, these calculations say he can call on $40 million upfront in seat license and another $210 million along the way in naming rights to help with the bank payments.
And there's also a difference between the myth and the reality of the $200 million "loan'' the Vikings claim to be getting from the NFL.
We've accepted the Vikings' description of it as a loan, when in reality Zygi is getting a grant from the NFL, as pointed out by Neil deMause on his "Field of Schemes'' website back in late December.
DeMause reported that this was what was approved by an NFL owners meeting when it came to the league helping to finance new stadiums. He broke it into three parts:
*The new loan program _ which actually will be called "G-4" - ups the maximum loan level from $150 million per team under the old plan to a maximum of $200 million under the new one.
*As under G-3, teams can repay the loan with club seat money THEY NORMALLY WOULD HAVE HAD TO SHARE WITH THE LEAGUE. They can now also use incremental regular ticket revenue, defined as the difference between ticket sales in the new stadium and average sales in the last three years of the old one.
*"The project must not involve any relocation of or change in an affected club's 'home territory.'" (Note: So Zygi wouldn't have able to get this $200 million from the NFL if he had relocated the team).
DeMause added: Teams looking to build new stadiums without paying for them themselves are, naturally, thrilled - since this is money that they wouldn't normally get to keep anyway. it's effectively a grant, not a loan.
DeMause also quoted Vikings stadium lobbyist Lester Bagley as calling the NFL's $200 million "great news for the team and our fans.''
Bagley changed his view somewhat over the $200 million in the final weeks of successful stadium maneuvering, depicting it more as simply a loan than a handout paid back through revenues that the Vikings would have been sending to the NFL anyway as part of revenue sharing.
Add it up - naming rights, license fees, NFL grant _ and you have $450 million of Zygi's $477 million. That doesn't seem to be much suffering for a fellow now being depicted as the patient martyr of stadium negotiations.